AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 19/10/2026
Moat44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Protected features across multiple product categories establish differentiation, supported by professional distribution and observed diagnostic demand. The economic strength of individual patents and the asserted brand premium are not quantified.
durability · 2/4 · Portfolio replenishment from 2023 to 2025 and diversified patent exposure support persistence. Continued innovation is necessary, and remaining patent lives and resistance to substitution are unknown.
customer dependency · 1/4 · Professional distribution, financed purchases and subscription revenue create ongoing relationships. These are weak indirect evidence of dependency because no exclusivity, migration burden or demonstrated switching penalty is disclosed.
erosion resilience · 2/4 · First-half 2026 organic growth and gross-margin improvement demonstrate resilience despite cost pressure. Slower repair-system growth and declining operating margins show uneven protection; competitive risks are possibilities rather than proof of realized share loss.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · — · Premium positioning and increasing price pressure are disclosed, but neither establishes realized selling-price changes. Organic growth includes several drivers and cannot isolate pricing outcomes.
retention · 2/4 · Diagnostic demand across successive periods, Tools organic growth and recognized subscription revenue support continuing engagement indirectly. They do not distinguish repeat customers from new buyers or quantify renewals.
margin resilience · 2/4 · RCI largely offset tariffs in 2025, and first-half 2026 gross margin improved despite higher costs. Operating margin before financial services and repair-system margins weakened. Resilience is mixed and attributable partly to cost savings and volume, not proven price pass-through.
contractual freedom · 1/4 · The disclosed $190.2 million of long-term fixed-consideration contracts demonstrates limited pricing flexibility on existing commitments, with revenue recognition extending through fiscal 2029 and thereafter. This supports a weak assessment for the disclosed contracts; broader product-price discretion, subscription repricing rights and franchise-term flexibility remain unestablished.
Predictability93
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 2.74
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 3.80
Financial strength99
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 97.43
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 1.18
- Net debt / operating income (x)
- -0.33
- Interest coverage (x)
- 26.29
- Current ratio (x)
- 4.79
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -0.69
- 3-year average SBC / revenue (%)
- 0.73
- cashConversionGrade
- 100.00
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual acquisition spending, capital investment and repurchases are disclosed, with no revolver borrowings in the first half of 2026. This supports an assessable but mixed record: acquisition returns and repurchase value creation are unproven, and the passages do not provide a complete operating-cash-flow comparison.
incentive alignment · 3/4 · Revenue and return-on-assets vesting conditions are implemented, PSU quantities actually changed with performance, and the fiscal 2025 consolidated financial bonus component paid nothing. Existing clawback and anti-hedging safeguards strengthen alignment. Half of annual incentives depends on personal strategic goals, limiting purely financial accountability.
execution · 2/4 · Actual results show recovery to 3.2% organic growth in the first half of 2026 and realized cost savings. Execution remains mixed following a fiscal 2024 organic decline, minimal fiscal 2025 organic growth, lower fiscal 2025 adjusted operating income and weaker 2026 repair-system earnings. This assesses reported operating outcomes rather than management's strategic claims.
governance · 2/4 · An independent lead director, annual board evaluations and compensation safeguards provide actual governance structures. Combined CEO and chairman roles and the lead director's long tenure limit the evidence for strong independent challenge; exceptional oversight effectiveness is not demonstrated.
Evidence
As of 2025 year end, Snap-on and its subsidiaries held approximately 945 active and pending patents in the United States and approximately 3,590 active and pending patents outside of the United States.
Patents, Trademarks and Other Intellectual Property; fiscal 2025 portfolio · Filed 12/02/2026
Sales relating to any single patent did not represent a material portion of Snap-on’s revenues in any of the last three years.
Patents, Trademarks and Other Intellectual Property; patent revenue concentration · Filed 12/02/2026
Examples of products that have features or designs that benefit from patent protection include hand tools, power tools, wheel alignment systems, wheel balancers, tire changers, vehicle lifts, tool storage, tool control, collision measurement, test lane equipment, brake lathes, electronic torque instruments, emissions-sensing devices and diagnostic equipment.
Patents, Trademarks and Other Intellectual Property; protected product features · Filed 12/02/2026
As of 2023 year end, Snap-on and its subsidiaries held approximately 890 active and pending patents in the United States and approximately 3,170 active and pending patents outside of the United States.
Patents, Trademarks and Other Intellectual Property; fiscal 2023 portfolio · Filed 16/02/2024
In general, as a manufacturer and marketer of premium products and services, the expectations of Snap-on’s customers and its franchisees are high.
Risk Factors; premium positioning and customer expectations · Filed 12/02/2026
The Snap-on Tools Group consists of business operations primarily serving vehicle service and repair technicians through the company’s multinational mobile tool distribution channel.
Segment Information; multinational mobile tool distribution channel · Filed 23/07/2026
The organic improvement reflects a double-digit increase in activity with OEM dealerships and a mid single-digit rise in sales of diagnostic and repair information products to independent repair shop owners and managers, partially offset by a low single-digit decline in sales of undercar equipment.
MD&A; fiscal 2025 Repair Systems & Information demand · Filed 12/02/2026
On an organic basis, low single-digit gains in undercar equipment and sales of diagnostic and repair information products to independent repair shop owners and managers were partially offset by a low single-digit decline in activity with OEM dealerships.
MD&A; second-quarter 2026 Repair Systems & Information organic demand · Filed 23/07/2026
Price competition in our various industries is intense and pricing pressures from competitors and customers continue to increase.
Risk Factors; intense competition and increasing pricing pressure · Filed 12/02/2026
Any inability to maintain customer satisfaction could diminish Snap-on’s premium image and reputation and could result in a lessening of our ability to command premium pricing.
Risk Factors; premium reputation and ability to command premium prices · Filed 12/02/2026
Our competitors’ new products may beat our products to market, be more effective, contain more features, be less expensive than our products, and/or render our products obsolete.
Risk Factors; competing innovation and potential obsolescence · Filed 16/02/2024
In addition, if we are unable to maintain effective relationships with franchisees, Snap-on or the franchisees may choose to terminate the relationship, which may result in: (i) open routes, in which end-user customers are not provided reliable service; (ii) litigation resulting from termination; (iii) reduced collections or increased charge-offs of franchisee receivables owed to Snap-on; and/or (iv) reduced collections or increased charge-offs of finance and contract receivables.
Risk Factors; franchise termination, open routes and collections · Filed 16/02/2024
Six Months Ended (Amounts in millions) July 4, 2026 June 28, 2025 Change External net sales $ 813.2 84.2 % $ 800.7 84.8 % $ 12.5 1.6 % Intersegment net sales 152.4 15.8 % 143.8 15.2 % 8.6 6.0 % Segment net sales 965.6 100.0 % 944.5 100.0 % 21.1 2.2 % Cost of goods sold (520.3) (53.9) % (507.9) (53.8) % (12.4) (2.4) % Gross profit 445.3 46.1 % 436.6 46.2 % 8.7 2.0 % Operating expenses (210.7) (21.8) % (194.7) (20.6) % (16.0) (8.2) % Segment operating earnings $ 234.6 24.3 % $ 241.9 25.6 % $ (7.3) (3.0) % Segment net sales of $965.6 million in the first six months of 2026 represented an increase of $21.1 million, or 2.2%, from 2025 levels, reflecting a $3.5 million, or 0.4%, organic gain, $12.9 million of favorable foreign currency translation, and $4.7 million of acquisition-related sales.
MD&A; first-half 2026 Repair Systems & Information results · Filed 23/07/2026
Net sales of $2,442.3 million in the first six months of 2026 represented an increase of $121.8, or 5.2%, from 2025 levels, reflecting a $74.7 million, or 3.2%, organic gain, $35.6 million of favorable foreign currency translation, and $11.5 million of acquisition-related sales.
MD&A; first-half 2026 consolidated sales growth · Filed 23/07/2026
Gross margin in the first six months improved 30 basis points from 2025 primarily reflecting the benefit of increased volume and savings from the company’s RCI initiatives, partially offset by higher material and other costs, as well as 20 bps of unfavorable foreign currency effects.
MD&A; first-half 2026 gross margin and cost savings · Filed 23/07/2026
As a percentage of net sales, operating earnings before financial services were 21.3% including 20 bps of unfavorable foreign currency effects and compared to 21.6% last year.
MD&A; first-half 2026 operating margin before financial services · Filed 23/07/2026
Six Months Ended (Amounts in millions) July 4, 2026 June 28, 2025 Change Segment net sales $ 994.8 100.0 % $ 953.9 100.0 % $ 40.9 4.3 % Cost of goods sold (519.0) (52.2) % (502.2) (52.6) % (16.8) (3.3) % Gross profit 475.8 47.8 % 451.7 47.4 % 24.1 5.3 % Operating expenses (255.7) (25.7) % (242.6) (25.5) % (13.1) (5.4) % Segment operating earnings $ 220.1 22.1 % $ 209.1 21.9 % $ 11.0 5.3 % Segment net sales of $994.8 million in the first six months of 2026 represented an increase of $40.9 million, or 4.3%, from 2025 levels, reflecting a $30.8 million, or 3.2%, organic sales gain and $10.1 million of favorable foreign currency translation.
MD&A; first-half 2026 Snap-on Tools results · Filed 23/07/2026
Management evaluates the company’s sales performance based on organic sales growth, which primarily reflects growth from the company’s existing businesses as a result of increased output, expanded customer base, geographic expansion, new product development and pricing changes, and excludes sales contributions from acquired operations the company did not own as of the comparable prior-year reporting period.
Segment Information; components of organic growth · Filed 23/07/2026
Finance receivables are comprised of extended-term payment contracts to both technicians and independent shop owners (i.e., franchisees’ customers) to enable them to purchase tools, diagnostics, and equipment products on an extended-term payment plan, with average payment terms of approximately four years.
Note 4: Receivables; customer financing terms · Filed 23/07/2026
During the three months ended April 4, 2026, Snap-on recognized $37.9 million of revenue that was included in the contract liability balance at January 3, 2026, which was primarily from the amortization of software subscriptions, extended warranties and other subscription agreements.
Notes to Condensed Consolidated Financial Statements; subscription and warranty revenue recognition · Filed 23/04/2026
Net cash used for acquisitions in the first six months of 2026 totaled $159.1 million.
MD&A; first-half 2026 acquisition spending · Filed 23/07/2026
Capital expenditures were $44.3 million and $42.6 million in the respective first six months of 2026 and 2025.
MD&A; first-half capital expenditures · Filed 23/07/2026
In the first six months of 2026, Snap-on repurchased 508,000 shares of its common stock for $191.3 million under its previously announced share repurchase programs.
MD&A; completed first-half 2026 repurchases · Filed 23/07/2026
No amounts were borrowed or outstanding under the Credit Facility during the six months ended and as of July 4, 2026.
MD&A; revolving credit facility utilization · Filed 23/07/2026
32 In February 2026, after comparing the Company’s consolidated financial results for fiscal 2025 to the consolidated financial performance goals, the Committee approved no payout relative to the consolidated financial results component of the annual incentive plan.
Compensation Discussion and Analysis; actual fiscal 2025 financial incentive outcome · Filed 12/03/2026
Vesting of the PSUs is dependent upon performance relative to pre-defined goals for revenue growth and return on net assets for the applicable performance period.
Stock-Based Compensation; adopted PSU performance conditions · Filed 23/07/2026
Changes to the company’s non-vested PSUs during the six months ended July 4, 2026, are as follows: Shares (in thousands) Fair Value Price per Share* Non-vested PSUs at January 3, 2026 80 $ 305.17 Granted 43 378.55 Performance assumption change** (18) 310.22 Non-vested PSUs at July 4, 2026 105 334.09 * Weighted-average ** Reflects the number of PSUs adjusted based on performance metrics.
Stock-Based Compensation; actual PSU performance adjustments · Filed 23/07/2026
Personal Strategic Business Goals Component As previously discussed, 50% of each executive officer’s annual incentive is based on the achievement of personal strategic business goals.
Compensation Discussion and Analysis; personal strategic goals weighting · Filed 12/03/2026
other than the change of control agreements described below; • Our change of control agreements utilize a double trigger and do not provide excise tax gross-up payments; • Our 2011 Incentive Stock and Awards Plan (the “2011 Plan”) generally requires a minimum vesting period of one year for stock options, SARs, performance shares, PSUs, performance-based restricted stock and performance-based RSUs, and a minimum vesting period of three years for time-based restricted stock and RSUs; • We include balanced performance metrics in all incentive plans that are established prior to the applicable performance period and require year-over-year improvement; 27 • We have not repriced underwater stock options and the 2011 Plan explicitly prohibits any repricing without shareholder approval; • We do not pay dividends until vesting of the underlying equity awards; • We have recoupment policies (the “Clawback Policies”) that cover all elements (cash and equity) of the Company’s incentive compensation program; • We have executive stock ownership guidelines that cover all of the Company’s executive officers, including the NEOs; • We do not provide perquisites to our executive officers based in the United States and only provide benefits consistent with local laws and customs in other countries; • We have a policy that prohibits the hedging and pledging of Company securities by directors, executive officers and other executive-level employees; • We do not pay above-market earnings on our executives’ deferred compensation accounts; • We retain an independent compensation consultant employed solely by the Committee; and • We hold an annual Say-on-Pay advisory vote of our shareholders.
Compensation Discussion and Analysis; existing compensation safeguards · Filed 12/03/2026
Mr. Holden, an independent director, has served as our Lead Director since 2009.
Board Leadership Structure; independent lead director · Filed 12/03/2026
Our Chairman is also our Chief Executive Officer and thus is not an independent director.
Board Leadership Structure; combined chairman and CEO roles · Filed 12/03/2026
Board and Director Evaluation Process The Board of Directors conducts a comprehensive annual evaluation of the individual directors and the Board as a whole, which is overseen by the Corporate Governance and Nominating Committee and led by the Chair of that committee, who is an independent director.
Board and Director Evaluation Process; annual evaluations · Filed 12/03/2026
The Company achieved a RONAEBIT performance of 35.2% and an operating income decline of 4.2% as compared to fiscal 2024, excluding the effects of foreign currency translation.
Compensation Discussion and Analysis; fiscal 2025 operating performance · Filed 12/03/2026
The acquisition expands Snap-on’s capabilities in these growing markets and further strengthens the company’s library of proprietary experienced-based data, as well as its product offerings to support the diagnosis and repair of increasingly complex vehicles and equipment.
Recent Acquisitions; management characterization of Diesel Laptops capabilities · Filed 23/07/2026
Peer companies’ revenue and/or market value are within a reasonable range relative to the Company, are direct competitors of the Company and/or have similar business characteristics or compete with the Company for executive talent.
Compensation Discussion and Analysis; mixed basis for compensation peer selection · Filed 12/03/2026
Consolidated net sales of $4,707.4 million in 2024 represented a decrease of $22.8 million, or 0.5%, from 2023 levels, reflecting a $40.6 million, or 0.9%, organic decline and $5.5 million of unfavorable foreign currency translation, partially offset by $23.3 million of acquisition-related sales.
MD&A; fiscal 2024 consolidated sales · Filed 13/02/2025
Net sales of $4,743.2 million in 2025 represented an increase of $35.8 million, or 0.8%, from 2024 levels, reflecting a $16.5 million, or 0.3%, organic sales gain and $19.3 million of favorable foreign currency translation.
MD&A; fiscal 2025 consolidated sales · Filed 12/02/2026
Snap-on’s 2025 fiscal year contained 53 weeks of operating results with the additional week occurring in the fourth quarter.
Fiscal-year conventions; additional fiscal 2025 operating week · Filed 12/02/2026
The impact of tariffs in 2025 was largely offset by benefits from the company’s RCI initiatives.
MD&A; fiscal 2025 tariff impact and RCI offsets · Filed 12/02/2026
While inflation has become more prevalent in the world economy, Snap‑on has taken steps to control and offset associated cost increases through its supply chain management, pricing actions, and deployment of Rapid Continuous Improvement (“RCI”).
Risk factors: inflation mitigation through pricing actions, supply chain management and RCI · Filed 12/02/2026
Management evaluates the company’s sales performance based on organic sales growth, which primarily reflects growth from the company’s existing businesses as a result of increased output, expanded customer base, geographic expansion, new product development and pricing changes, and excludes sales contributions from acquired operations the company did not own as of the comparable prior-year reporting period.
MD&A: definition and multiple drivers of organic sales growth · Filed 23/07/2026
Snap-on had $190.2 million of long-term contracts that have fixed consideration that extends beyond one year as of July 4, 2026.
Revenue recognition: long-term contracts with fixed consideration as of July 4, 2026 · Filed 23/07/2026
Snap-on expects to recognize approximately 65% of these contracts as revenue by the end of fiscal 2027, an additional 30% by the end of fiscal 2029, and the balance thereafter.
Revenue recognition: expected recognition schedule for long-term fixed-consideration contracts · Filed 23/07/2026
Management evaluates the company’s sales performance based on organic sales growth, which primarily reflects growth from the company’s existing businesses as a result of increased output, expanded customer base, geographic expansion, new product development and pricing changes, and excludes sales contributions from acquired operations the company did not own as of the comparable prior-year reporting period.
Management discussion: organic sales growth definition · Filed 23/07/2026
Gross margin in the first six months improved 30 basis points from 2025 primarily reflecting the benefit of increased volume and savings from the company’s RCI initiatives, partially offset by higher material and other costs, as well as 20 bps of unfavorable foreign currency effects.
First-six-months 2026 gross margin discussion · Filed 23/07/2026
